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Commingling and Unitization Provisions in Mining Agreements

M. Craig Haase, Mining Agreements III

As development of mineral properties has turned from small, underground mining of veins and stringers to development of large tracts of widely disseminated mineral deposits, the chances of multiple owners of a single ore deposit have dramatically increased. Thus, although the need for commingling of ore from and unitization of multiple mining tracts has existed throughout the history of mining, modern deposits and mining methods have required the more frequent insertion of commingling and unitization provisions in mining agreements. However, before meaningful commingling and unitization provisions can be drafted, it is necessary to understand both the reasons such provisions are necessary as well as the functions to be performed by those charged with the execution of such provisions. The purpose of this Paper is to provide not so much a discussion and review of the law of commingling and unitization as it is to provide the agreement drafter with the requisite understandings of these underlying functions.